TOP 10 CHALLENGES FOR INVESTMENT BANKS

Liquid Standards: Improving the Client Experience

How can investment banks meet client expectations when today’s service standards are so liquid?

Business-to-consumer (B2C) experiences centered on intuitive self-service and seamless interactions are as well shaping client expectations in the business-to-business (B2B) realm. As investment banks transform their businesses and operations, they face the challenge of meeting changing client expectations without the “one-stop-shop” business model, bespoke products and other differentiators they have relied on in the past.

Client expectations are changing

Accenture’s 2015 B2B Customer Experience Research confirmed that many business-to-business companies, including investment banks, face heightened expectations from their clients. Among respondents to this survey: 78 percent of users expect tailored solutions, 76 percent want a self-directed experience, and 76 percent monitor and evaluate vendor performance. They expect frictionless and intuitive solutions, a consistent level of service across channels, and solution providers to go above and beyond to keep their business.

The rise of global fixed-income e-trading in recent years reflects this trend. Part of its growth can be attributed to changes in regulation, including US swap rules, but also fixed-income dealers are providing investors with an efficient and frictionless process.

Global fixed-income e-trading

Source: Greenwich Associates 2015 Global Fixed-Income Study

Between 2012 and 2015, the percentage of investors involved in global fixed-income e-trading remained relatively flat at 44 percent, but the notional volume increased by 13 percent.

Multi-dealer platforms are on the rise

The rise of low-touch, multi-dealer platforms (MDPs) in global fixed-income e-trading, as opposed to high-touch, single-dealer platforms (SDPs), coincides with enhanced regulatory scrutiny, increased capital requirements and unsustainable spending on SDP functionality that may not always have delivered the expected results.

Foreign exchange dealers are winning market share with aggressive pricing on MDPs, even though investment banks execute an average of 20 percent of their trading volume on SDPs (Greenwich Associates). As investment banks determine how to differentiate themselves in the marketplace, they should tailor the client experience to their chosen platform and the needs of their clients—factors that may vary by product and region.

Barriers to client experience transformation are numerous

To meet evolving client expectations and preferences, investment banks must determine which silos to tear down to deliver an appropriate client experience. However, there are a number of factors that can impede their progress.

Common barriers to successfulclient experience transformation

48%(+2%)(-1%)46%(-1%)45%(+0%)46%(+2%)45%(+0%)44%(-1%)43%(-1%)43%(-1%)42%(+3%)46%Dedicating too little timeProcesses not formalized/ cohesiveLack of CEO or C-level priorityPoor cross-company collaborationCustomerexperienceROI is unclearBack office has not harmonizedPoor customer data/analyticsLack of critical technology/toolsLack of funding or other resourcesLack of required skills48%(+2%)(-1%)46%(-1%)45%(+0%)46%(+2%)45%(+0%)44%(-1%)43%(-1%)43%(-1%)42%(+3%)46%Dedicating too little timeProcesses not formalized/cohesiveLack of CEO or C-level priorityPoor cross-company collaborationCustomer experience ROI is unclearBack office has not harmonizedPoor customer data/analyticsLack of critical technology/toolsLack of funding or other resourcesLack of required skills

Next steps

Walk the talk and outperform

Make client experience a true priority by establishing the key strategic and operational execution capabilities your organization needs to perform at its peak.

Start from the back

Client experience delivery excellence begins with the quality of your organization’s middle office, operations and other so called “back office functions”. The client onboarding experience is a great example of where a difference could be made. Explore how technology could help facilitate, support and improve the process.

Don’t avoid disruption—create it

Lead the change by tearing down silos, taking a front to back view of processes such as client communications, credit management, onboarding, know your customer and then using digitally enabled channels to extend and enhance the client experience.

Expand your connected distributed ecosystem

Align your strategy on fintech partners with other eco-system plays including your approach to industry utilities.

Put talent and leadership at your core

“Play to win” by focusing on building digital talent and skills in IT, operations and other critical client facing departments.

Conclusion

By assessing the existing client experience, and mapping out the “future-state” client experience they want to create, firms can begin to identify necessary changes to their delivery channels, and feedback and monitoring mechanisms.

Successfully operationalizing the five “playing-to-win” differentiators identified above will require a shift in mindset. Going forward, investment banks should approach client experience as a journey rather than a destination—something to evolve rather than solve.

Challenge Highlights

Has your investment bank mastered customer experience transformation? Discover six factors that could help set your organization apart.

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